South AFrica inflation pressures ease: official data

19th June 2013, Comments 0 comments

South African consumer prices edged down in May thanks to cheaper petrol, official figures showed on Wednesday, easing worries about high inflation.

Inflation fell to 5.6 percent at an annualised rate, after three months stuck at 5.9 percent -- near the upper limit of the South African Reserve Bank's target band.

Statistics South Africa data showed a more than five-percent drop in petrol prices was largely responsible for the slowing pace of price rises.

But the news only slightly eased concerns that South Africa is on a perilous spiral of high inflation and low growth -- so-called stagflation.

The weakening rand has also pushed up import prices, meaning inflation is expected to remain high.

"Despite the slowdown in the annual inflation number in May, we still foresee a breach of the six percent upper inflation target range in the third quarter of this year, with the weak rand exerting most of the upward pressure," said Nedbank economists.

© 2013 AFP

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